Group 1: CPI Expectations - July CPI is expected to rise, with Bloomberg analysts predicting a month-on-month increase of +0.2% and a year-on-year increase of +2.8%[2] - Core CPI is forecasted to increase by +0.3% month-on-month and +3.0% year-on-year[2] - The Federal Reserve's Inflation Nowcasting predicts a month-on-month increase of +0.16% for CPI and +0.24% for core CPI, with year-on-year increases of +2.72% and +3.04% respectively[2] Group 2: Market Reactions - The expectation of a rate cut has increased due to geopolitical easing, leading to a rise in U.S. stock markets, with the S&P 500 and Nasdaq gaining 2.43% and 3.87% respectively[3] - U.S. Treasury yields rose, with the 10-year yield increasing by 6.7 basis points to 4.283% and the 2-year yield rising by 8.1 basis points to 3.762%[3] - The dollar index decreased by 0.97% to 98.18, while spot gold prices rose by 1.02% to $3,397 per ounce[3] Group 3: Economic Indicators - The ISM Services PMI for July recorded at 50.1, below the expected 51.5, indicating a slowdown in service sector growth[3] - New orders fell to 50.3 and the employment index dropped to 46.4, suggesting weakening demand in the services sector[3] - The New York Fed's consumer survey indicated a one-year inflation expectation of 3.09%, up from 3.02%[3] Group 4: Risks and Future Outlook - The implementation of tariffs may lead to further inflationary pressures, with the potential for CPI to rise in the coming months[4] - There is a risk that the Federal Reserve's rate cuts could lead to an inflation rebound if executed too aggressively[4] - The nomination of Stephen Milan to the Federal Reserve Board may increase internal disagreements regarding future interest rate paths[3]

Core Viewpoint - The article discusses the fluctuations in the US economy and the impact of various factors such as monetary policy, fiscal measures, and international trade on market performance, suggesting that while there may be short-term adjustments, the long-term outlook for risk assets remains positive due to potential liquidity easing and fiscal support [2][18][25]. Group 1: Economic Conditions - The US economy is believed to have bottomed out in June and showed signs of improvement in July, with a debt issuance wave beginning in July to absorb dollar liquidity [2][18]. - The impact of tariffs on inflation is expected to gradually manifest, potentially affecting US stock performance negatively in August and September [2][18]. - The 10-year US Treasury yield is projected to quickly bottom out and rise to around 4.8% [2][18]. Group 2: Dollar Index and Liquidity - The dollar index reflects cross-border capital flows, fundamentals, and dollar liquidity, maintaining strength despite the US's fiscal and trade deficits due to ongoing capital inflows driven by AI investments [3][4]. - Following a structural depreciation in April, the dollar index has shown a recovery since May, correlating with the decline in the US-German yield spread [7][9]. - A significant increase in net debt issuance occurred in July, totaling $308.3 billion, compared to only $104.9 billion from April to June [13][15]. Group 3: Inflation and Fiscal Policy - The risk of inflation is increasing as the impact of tariffs on import costs becomes more apparent, alongside strong wage growth and low inflation base effects [18][20]. - The Treasury is expected to issue $1 trillion in net debt from July to September, with long-term debt issuance reaching $470 billion, which may lead to financial risks and market volatility [22][24]. - The potential for a "new accord" between fiscal and monetary policy could lead to renewed dollar liquidity and improved performance of risk assets in the long term [25].

Group 1 - The core viewpoint of the article is that the US economy shows resilience, supported by a decline in imports, strong consumer spending, and a return of manufacturing investments, leading to a narrowing of interest rate cut expectations from the Federal Reserve [1][2][3] Group 2 - The US GDP growth rate for Q2 2025 was 3.0%, exceeding market expectations of 2.6% and significantly higher than the previous value of -0.5% [1] - Key supports for the GDP growth included a decrease in imports, resilient consumer spending, and private non-residential investment, while private inventory changes, residential investment, and goods and services exports were the main drags [1] - The Federal Reserve's recent meeting revealed internal divisions, with two members advocating for a 25 basis point rate cut, indicating increasing disagreement within the committee [2] - The Fed expressed greater uncertainty regarding economic and inflation outlooks, with tariffs beginning to impact consumer prices, suggesting that inflation data will be influenced by these tariffs [2] - The Fed's stance remains hawkish, with a commitment to data-driven decisions, leading to a further reduction in market expectations for rate cuts throughout the year [2][3] - The expectation for interest rate cuts has narrowed, with only one potential cut anticipated in October, and the risk of no cuts for the entire year has increased [3] - The 10-year US Treasury yield is projected to oscillate between 4.5% and 5.0% in the second half of the year, reflecting a higher interest rate environment [3] - The US stock market is expected to experience some volatility but maintain an overall upward trend, particularly in sectors supported by capital expenditures and performance, such as AI and semiconductors [3]

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - The Fed decided to keep the policy rate unchanged at 4.25 - 4.5% in the July 2025 meeting, with some members opposing and supporting a 25BP rate cut [8]. - Powell's stance is hawkish, and he has no pre - set expectations for the September policy decision, which dampens market rate - cut expectations [8]. - The certainty of a September rate cut by the Fed is low. If the unemployment rate remains stable or slightly rises in the next two months, the Fed may keep the rate unchanged to wait for tariff transmission results [9]. - If inflation does not rise significantly in the next two months, the bond market opportunities will increase in the fourth quarter; if inflation rises significantly, the US Treasury yields may rise further. It is recommended to maintain a relatively short duration in the short term [9]. - The US dollar index has rebounded to around 100 points. Short - term dollar short - covering may bring some upward space, and the view that the US dollar index will operate in the 95 - 105 range is maintained [6][9]. Summary by Related Catalogs Fed Meeting Decision - In the July 2025 meeting, the Fed kept the policy rate at 4.25 - 4.5% unchanged. Members Bowman and Waller voted against and supported a 25BP rate cut this month [8]. Powell's Stance - Powell adheres to data - dependence and has no policy expectations for September, which hits market rate - cut expectations [8]. - In terms of inflation, Powell aims to prevent one - time price increases from turning into continuous inflation, hopes to maintain a moderately restrictive monetary policy, and believes that tariff transmission to prices may be slower than expected [8][10]. - Regarding employment, Powell thinks the job market is relatively stable despite some downward risks [5][10]. - On economic growth, Powell admits that the overall economic growth has slowed down, and large fluctuations in net exports may affect consumer spending, making some signals difficult to interpret. He also believes that although consumer growth has slowed down, consumers' credit conditions are good [5][10]. Market Reaction - After the Fed's press conference, the market lowered the expectation of a September rate cut. Short - term interest rates rose significantly, the US dollar continued to rise, and the US stock market was under pressure. As of 4:30 Beijing time, the 2Y and 10Y US Treasury yields rose by 6.8BP and 2.8BP respectively compared with before the meeting, the US dollar index rose 0.6% to around 100 points, and the S&P 500 fell 0.4% at the close [9]. Outlook for September Fed Meeting - The certainty of a September rate cut by the Fed is not high. If the unemployment rate remains stable or slightly rises in the next two months, the Fed may keep the rate unchanged to wait for longer - term tariff transmission results [9]. Outlook for US Treasury Yields - If inflation does not rise significantly in the next two months, the bond market opportunities will increase in the fourth quarter; if inflation rises significantly, the US Treasury yields may rise further. It is recommended to maintain a relatively short duration in the short term, and the downward revision of the rate - cut expectation provides some allocation opportunities [9]. Outlook for US Dollar Index - After the US - EU trade agreement, the US dollar index has generally risen and has now rebounded to around 100 points. Short - term dollar short - covering may bring some upward space. Without a substantial weakening signal in the US labor market and continuous rate cuts by the Fed, the view that the US dollar index will operate in the 95 - 105 range is maintained [6][9].

Report Industry Investment Rating - No information provided regarding the industry investment rating for this specific topic in the given content. Core Viewpoints - At the July 2025 meeting, the Fed decided to keep the policy rate unchanged at 4.25 - 4.5%, with dissenting votes from Bowman and Waller who supported a 25BP rate cut. Powell's hawkish stance dampened market expectations of a September rate cut [2]. - The market adjusted its September rate - cut expectations after the Fed's press conference, with short - term interest rates rising significantly, the US dollar continuing to strengthen, and the US stock market under pressure. As of 4:30 Beijing time, the 2Y and 10Y US Treasury yields rose 6.8BP and 2.8BP respectively compared to before the meeting, the US dollar index rose 0.6% to around 100 points, and the S&P 500 fell 0.4% at the close [2]. - There is no high certainty of a September rate cut by the Fed. If the unemployment rate remains stable or rises slightly in the next two months, the Fed may keep the interest rate unchanged to wait for the longer - term impact of tariffs. The delay in tariff transfer to consumers may imply consumer weakness [2]. - Regarding US Treasury yields, if inflation does not rise significantly in the next two months, the bond market opportunities will increase in the fourth quarter; if inflation rises significantly, US Treasury yields may rise further. Short - term, it is recommended to maintain a relatively short duration [2]. - For the US dollar index, short - term short - covering may bring some upward space. The view that the US dollar index will operate in the 95 - 105 range is maintained [2]. Summary by Related Content Fed Meeting Decision - In the July 2025 meeting, the Fed kept the policy rate at 4.25 - 4.5%. Bowman and Waller voted against, supporting a 25BP rate cut this month [2]. Powell's Stance - Powell's stance was hawkish, not pre - setting expectations for the September policy decision. He adheres to data - dependence. In terms of inflation, he aims to prevent one - time price increases from turning into persistent inflation and hopes to maintain a moderately restrictive monetary policy. He believes the impact of tariffs on inflation is in the early stage and the transfer to consumers may be slower than expected [2]. - Regarding employment, he thinks the job market is relatively stable despite some downside risks. In terms of economic growth, he admits the overall economic growth has slowed, and the large fluctuations in net exports may affect consumer spending, making it difficult to interpret some signals. He also believes consumers' credit conditions are good despite the slowdown in consumption growth [2]. Market Reaction - After the Fed's press conference, the market lowered its September rate - cut expectations. Short - term interest rates rose significantly, the US dollar continued to strengthen, and the US stock market was under pressure. As of 4:30 Beijing time, the 2Y and 10Y US Treasury yields rose 6.8BP and 2.8BP respectively compared to before the meeting, the US dollar index rose 0.6% to around 100 points, and the S&P 500 fell 0.4% at the close [2]. Outlook for September Fed Meeting - There is no high certainty of a September rate cut. If the unemployment rate remains stable or rises slightly in the next two months, the Fed may keep the interest rate unchanged to wait for the longer - term impact of tariffs. The delay in tariff transfer to consumers may imply consumer weakness [2]. US Treasury Yields Outlook - If inflation does not rise significantly in the next two months, the bond market opportunities will increase in the fourth quarter; if inflation rises significantly, US Treasury yields may rise further. Short - term, it is recommended to maintain a relatively short duration, and the downward revision of rate - cut expectations provides some allocation opportunities [2]. US Dollar Index Outlook - After the US - EU trade agreement, the US dollar index has risen. Short - term short - covering may bring some upward space. The view that the US dollar index will operate in the 95 - 105 range is maintained [2].

Group 1: Federal Reserve Stance - Federal Reserve continues to pause interest rate cuts, indicating a shift from "economic activity continues to expand steadily" to "economic activity growth has slowed in the first half of the year" [1] - Powell's hawkish stance suggests that asserting a rate cut in September is premature, with inflation outlook showing mixed signals [1] - Market's expectation for rate cuts has retracted by 10 basis points, with the CME FedWatch indicating a drop from 45 basis points to 35 basis points for the year [1] Group 2: Economic Indicators - Labor market indicators such as turnover rates, job vacancies, and unemployment rates are close to levels from a year ago, indicating no significant weakness [1] - Employment creation and labor supply are slowing, presenting downside risks to the labor market [1] - The market is now leaning towards a single rate cut for the year, with expectations for a potential shift towards rate cut anticipation in August if tariff impacts on inflation remain manageable [2] Group 3: Market Reactions - Following the announcement, the US dollar index rose approximately 0.5%, nearing 100, while the 10-year Treasury yield increased from 4.34% to around 4.38% [1] - The market's confidence in a rate cut in October has decreased to about 80% following the meeting [1] - The overall economic data rebound and retraction of rate cut expectations are expected to support the dollar, although future agreements remain uncertain [2]

Group 1: FOMC Meeting Insights - The July FOMC meeting maintained interest rates at 4.25-4.5% with a 9-2 vote, signaling a hawkish stance due to inflation concerns[1] - Powell indicated that the distance to achieve inflation targets is greater than that for employment, suggesting a need for restrictive policy rates[1] - The market now expects the likelihood of a rate cut in September to be delayed until Q4 2025, with 2-year and 10-year U.S. Treasury yields projected to rise to 4.05% and 4.5% respectively in August and September[1] Group 2: Economic Indicators and Projections - Economic growth is showing signs of moderation, with consumer spending beginning to slow down, and GDP growth expected to be revised downwards[1] - The labor market remains balanced, but there are signs of downward risks with a slight decline in private sector job opportunities[1] - Inflation remains a concern, with tariffs beginning to impact goods inflation, while service sector inflation shows improvement[1] Group 3: Market Reactions and Future Expectations - Following the FOMC meeting, the probability of a September rate cut has decreased to 47%, with an average expectation of 1.48 rate cuts for the year[1] - The market anticipates a new round of monetary easing after the appointment of a new Fed chair, with expectations for three rate cuts in 2026 potentially increasing to four or more[1] - The overall strategy suggests that the U.S. Treasury yields may initially rise before declining later in the year as the market adjusts to new monetary policies[1]

Overview - The core CPI data for June in the US was slightly weaker than expected, but the inflation effects of tariffs are becoming more evident [3][7][38] - The June CPI year-on-year was 2.7%, slightly above the market expectation of 2.6%, while the core CPI was 2.9%, matching expectations [3][38] - The market reacted to the data with a temporary decline in the 10Y Treasury yield and the US dollar index, which later recovered, indicating a focus on future inflation expectations [11][38] Structure - The main drivers of the CPI rebound include rising oil prices, core goods (excluding new and used cars), and non-rent services [4][39] - The energy CPI for June increased by 0.9% month-on-month, recovering from a previous decline of -1.0%, reflecting global oil price increases [4][39] - Core goods inflation showed signs of warming, with a month-on-month increase of 0.2%, driven by clothing, toys, and audio-visual equipment, indicating the impact of tariffs [20][39] - Rent inflation slightly slowed to 0.2% month-on-month, while core non-rent service inflation rebounded, particularly in medical, transportation, and entertainment services [4][39] Outlook - The second half of the year may see continued upward pressure on inflation, with the third quarter being a critical verification period for tariff inflation effects [5][28][40] - The Federal Reserve is expected to initiate rate cuts in September, with two cuts anticipated within the year, despite potential inflation increases [5][34][40] - The combination of moderate inflation increases and weakening employment may influence the Fed's decision-making [34][40]

Group 1: Macroeconomy - The core of the "Great Beautiful Act" signed by Trump includes significant tax cuts for corporations and individuals, reductions in clean energy subsidies, and cuts to Medicaid and SNAP, which will increase the fiscal deficit in the future [3] - The act is projected to boost the actual GDP by less than 0.5 percentage points and has an inflationary impact of no more than 0.15 percentage points by 2026 [3] - Over the next decade, the combination of tariffs and tax cuts is expected to increase the net deficit by approximately $1.3 trillion, maintaining a deficit rate around 6% [3] - Current economic conditions, including low unemployment and moderate inflation, suggest that the U.S. government debt does not face immediate risks [3] Group 2: Strategy - The passage of the "Great Beautiful Act" is anticipated to increase bond supply, which may lead to higher U.S. Treasury yields, potentially affecting market sentiment and stock prices in the short term [7] - Despite short-term liquidity disturbances, the overall credit cycle recovery and the Federal Reserve's interest rate reduction trajectory remain unchanged, providing better buying opportunities for both U.S. stocks and bonds [7] Group 3: Quantitative & ESG - A real-time forecasting model driven by large language models (LLMs) is proposed to address the lag in macroeconomic indicators, allowing for timely adjustments in investment strategies based on economic changes [11] Group 4: Strategy - A forecast for the mid-year report indicates that A-share earnings growth may slow compared to the first quarter, but the second half of the year could see improved performance, particularly in the non-bank financial sector due to high market activity [14] - In the non-financial sector, midstream and upstream companies may face performance pressures due to price impacts, while sectors like gold, consumer upgrades, and tech hardware are expected to show structural strengths [14] Group 5: Food and Beverage Industry - The food and beverage sector is expected to stabilize in demand in the second half of 2025, driven by government policies aimed at boosting consumption and encouraging births [17] - The mass food segment has shown signs of improvement since March, with new consumption trends in snacks and health drinks likely to drive valuation increases in the sector [17] - The liquor sector is currently in a valuation correction phase, but the basic valuation has reflected pessimistic expectations, indicating emerging investment value [17]

Core Viewpoint - The recent tax and spending bill passed by Congress is expected to exacerbate long-term debt issues in the U.S., despite temporarily alleviating short-term default risks [2][3]. Group 1: Legislative Impact - The bill extends Trump's 2017 tax cuts and authorizes increased spending on border security and military, while significantly cutting Medicare and Medicaid [2]. - The borrowing limit for the U.S. government has been raised by $5 trillion, which is projected to increase national debt by $3.4 trillion over the next decade [2][3]. - The Congressional Budget Office estimates that the bill will reduce tax revenue by $4.5 trillion and cut spending by $1.2 trillion over the next ten years, resulting in 10.9 million people losing federal health insurance [3]. Group 2: Market Reactions - Foreign investors are reportedly selling U.S. Treasuries, raising concerns about declining demand and increasing borrowing costs [3]. - The 10-year Treasury yield has rebounded due to investor worries about fiscal health, indicating a potential long-term rise in interest rates [4]. - The market's reaction to the bill has been relatively muted, as the expansion of the deficit has already been priced in since Trump's return to office [5]. Group 3: Economic Outlook - The bill is expected to contribute 0.5% to economic growth next year, but concerns remain that the debt burden may offset the intended economic stimulus [3]. - The focus of the market is shifting towards economic data and corporate earnings, with the debt issue becoming a secondary concern [5].